Correlation Between Newton Protocol and BLZ

Can any of the company-specific risk be diversified away by investing in both Newton Protocol and BLZ at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Newton Protocol and BLZ into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Newton Protocol and BLZ, you can compare the effects of market volatilities on Newton Protocol and BLZ and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Newton Protocol with a short position of BLZ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newton Protocol and BLZ.

Diversification Opportunities for Newton Protocol and BLZ

-0.48

Correlation Coefficient

Newton Protocol  BLZ

Very good diversification

The 3 months correlation between Newton and BLZ is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Newton Protocol and BLZ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BLZ and Newton Protocol is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Newton Protocol are associated (or correlated) with BLZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BLZ has no effect on the direction of Newton Protocol i.e., Newton Protocol and BLZ go up and down completely randomly.

Pair Corralation between Newton Protocol and BLZ

Assuming the 90 days trading horizon Newton Protocol is expected to generate 28.64 times more return on investment than BLZ. However, Newton Protocol is 28.64 times more volatile than BLZ. It trades about 0.12 of its potential returns per unit of risk. BLZ is currently generating about 0.06 per unit of risk. If you would invest  0.00  in Newton Protocol on April 24, 2025 and sell it today you would earn a total of  37.00  from holding Newton Protocol or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Newton Protocol  vs.  BLZ

Newton Protocol

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Newton Protocol are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Newton Protocol exhibited solid returns over the last few months and may actually be approaching a breakup point.

BLZ

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BLZ are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, BLZ exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Newton Protocol and BLZ

The main advantage of trading using opposite Newton Protocol and BLZ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newton Protocol position performs unexpectedly, BLZ can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BLZ will offset losses from the drop in BLZ's long position.

The idea behind Newton Protocol and BLZ pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..